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Crisis of 2008

July 31, 2015

This is the time in the political season when negative sentiments get all the coverage.

Taking power away from an incumbent party requires negativity. You have to convince people things aren’t that good, that you’re the guys to fix things. To even make an intra-party insurgency work, you have to convince people within that party that things are wrong somehow.

The currencies of China and the European Union, meanwhile, are falling in value. The yen is in freefall, you can buy 123 of them for $1. Deflation has replaced inflation as the economic buzzkill, with oil leading commodities down. What we need to buy is getting cheaper, and what we have to buy it with is worth more than it has been for over a decade.

May 22, 2015

Every election represents a conflict, with choices. Some, like the Crisis Election of 2008, are hard. Others, like the Validation Election of 2016, are easy.

They’re made easy by underlying trends in the economy. Technology is now dominant over oil. It’s even replacing oil, solar and wind devices reducing fuel demand. The gating factor in competition among people, companies and even countries has become our ability to build human capital, and deploy it, people becoming the very definition of wealth-generating capacity.

There is also a sense of urgency driving all this change, a mission to which my children, and yours, have been called, one even greater than that faced by our parents, whom we call The Greatest Generation. That is the climate crisis, and “Millennials,” the derogatory nickname stuck on these kids by jealous oldsters, understand this.

Thus trends in technology, and governance, are making the coming political choices easy.

May 15, 2015

This means that Democratic policies, and priorities, are due to dominate your kids’ lives as the policies and priorities of Richard Nixon dominated my lifetime.

But this doesn’t mean that Democrats win all elections. Republicans have won both midterm elections of the Obama Era so far, and decisively. They control most state houses, most state legislatures, and both houses of Congress, standing in ever-firmer opposition to the changes President Obama has brought forward.

What we’re waiting for, politically, is validation of the Obama Thesis. We are waiting to see if Obama-ism can win without Obama on the ballot.

Until that happens, Washington pundits will stupidly insist that everything he’s stood for is a one-man phenomenon, his success a reflection of his unique personality and a political machine that answers only to him.

May 08, 2015

There is a curious quiet descending over American politics. The gun has gone off for the 2016 race, most contenders have announced, yet it’s drawing a big yawn from most people.

The reason for that is simple. We have entered the Obama Era.

The crisis of 2008 has passed. The economy is growing. A new course has been set, of social liberalism and economic conservatism, something that seemed impossible to imagine a decade ago. Our foreign policy has been transformed, and our children, our troops, our heroes are no longer the “tip of the spear.”

Oil prices are down, and fossil fuels are gradually being displaced by solar and wind power in the electrical grid, which is also acquiring intelligence and storage, becoming what Al Gore once called the “Electranet.”

Change has happened. Most of the change is irrevocable. The roles of the parties have reversed. It is now the Democratic Party that sets the course, and the job of the Republican Party to lean against it.

January 30, 2015

We are now 7 years removed from the Great Crisis that brought us Barack Obama. (We are also no further removed in time from the movie poster at the right was from the end of the war it portrayed.)

For those keeping score at home, that means we are now playing the 1939 game, as that year provides the best analogy to our time.

In 1939, the world was slouching toward war. The West had returned to the austerity policies, negative growth and deflation of the crisis because bankers were back to making policy, and bankers don’t understand that money is a verb.

The bad guys of the time got this. Hitler ignored the bankers and re-armed his country. So did Japan. So did Italy. They demanded that money be spent, they directed it be spent on arms, and in the course of spending that money the economies of the Fascists grew rapidly.

In our time, bankers have far more control of the world than they did then, so austerity and deflation are more widespread. Austerity rules Europe, it dominates the U.S., and it’s becoming increasingly popular in China.

Only Vladimir Putin is prepared to ignore this reality and put money to work. He has sunk his currency, sunk his economy, but he has spent, believing that aggressive wars to win territory can succeed.

January 02, 2015

The 20th century was dominated by resource capitalism. The great wars of that century were all built around a desire of great powers for direct access to natural resources – coal, gold, diamonds, and most especially oil.

The crisis we have just passed through, the one that began with the economic collapse of 2008 and the election of Barack Obama, is the last paroxysm of this old order.

Oil’s control of our economy is fading, just as manufacturing faded in the 1970s, production economics faded in the 1930s, and unregulated monopoly faded in the 1890s.

December 26, 2014

Every business era has a leading industry, a ruling industry, and a fading industry.

It’s clear that for our time – for the rest of my life anyway – the leading industry will be computing and the fading industry will be energy. The rising industry will likely be biosciences, including everything from prosthetics to genetic engineering.

December 19, 2014

Seen through the prism of a day, a week, or even a month, this seems to have been an “annus horribilus” for Barack Obama.

Hating him has become a national pastime. His party was pounded in the November midterm elections. For the rest of his term he will face a Congress filled with Republicans who are like rabid dogs in their personal hatred for him, and all he stands for.

In fact, history will record this as the year the tide turned, not only in President Obama’s favor, but in favor of the Obama Thesis of Consensus, which he represents.

The reason has to do with a history paper my own son wrote in high school. He chose to major in biology, but his 11th grade paper contrasted the foreign policy approaches of John F. Kennedy and Ronald Reagan relating to the Cold War and the Soviet Union. It was pretty good.

Kennedy talked soft power but used hard power, military force, both in Cuba and in Vietnam. Reagan talked hard power but actually used soft power, diplomacy and economics, jawboning the price of oil from nearly $50/barrel down to as low as $8.

The immediate result of what Kennedy did was Vietnam. Reagan got the collapse of the Soviet Union.

December 05, 2014

Think of this as Volume 18, Number 48 of the newsletter I have written weekly since March, 1997. Enjoy.

A few weeks ago I posited the theory that President Obama threw the last election so that Democrats can come back stronger in 2016 and beyond.

But there’s another theory, and it’s based on a recent visit to the suburbs.

Atlanta is divided into two parts. I live Inside the Perimeter (ITP). Most of the city is Outside the Perimeter (OTP), the I-285 ring freeway dividing them from one another. I’ve been surprised that anyone could be against this government since life is great ITP. My home’s value has increased, there are tons of new shops and restaurants opening up within walking distance, and the new intown malls built over the last 10 years are crowded all the time.

As I’ve written here many times, the center of our economic life is changing. It’s moving from offices to labs. Most of the jobs done in office towers – marketing, middle management, etc. – can now be done by computers. Those jobs aren’t coming back.

The Mad Man era is over, Willy Loman is now an algorithm, and if Dan Draper can’t code he’s hitting the bricks alongside him. The offices that remain are basically factories, software factories. Atlanta is lucky to have so many software companies, especially in complex areas like transaction processing, which happens to be where my wife has made her career.

S0 economically, things are great in my household. I have been doing pretty well moving my beat from technology to finance. She has been doing great at her job, which she’s very good at. Our assets have grown substantially in the last six years, and our lives much more convenient. It has been a great time for us.

November 14, 2014

Think of this as Volume 18, Number 45 of the newsletter I have written weekly since March, 1997. Enjoy.

What’s unique about the present crisis, which began in 2008, is that it has been so slow moving. It has been slow moving because it has been, for the most part, non-violent. It has been non-violent, in large part, because Barack Obama has refused to give-in to liberal Democratic calls for him to be more confrontational.

That makes sense when you understand the Obama Thesis of Consensus, which I first wrote about under that name almost six years ago but had been describing, under other titles, for almost three years before that.

Consensus implies that people come to agreement, despite sharp disagreement. If consensus is what you’re looking for the last six years have been a complete failure. Republicans continue to play politics based on the Nixon Thesis of Conflict , and most Democrats today want to play the same game.

Which leads me to this startling conclusion. Barack Obama threw the mid-terms.